Help! VA Appraisal came in $40K less

[shrubberyvaluation]

Scenario: Conventional Loan gets an appraisal for a house at purchase price for $310K, but wanted some seller concessions that the sellers declined, and the buyers walked. The house goes back on the market and within a week or so the sellers get a new contract with a VA loan buyer. So because VA requires its own appraisal they send their appraiser out (who just happens to be the same person that appraised the house I was trying to buy). This VA appraiser comes back with an appraisal of $290K, nearly $20K less than the appraisal done the week before, using comps. nearly a year old. During Tidewater the comps used in the conventional appraisal are submitted, but the VA appraiser refuses to consider them for one reason or another. Deal crashes.

When I talk to several realtors in the area asking about whether they've seen issues with VA/FHA appraisals without mentioning any names, it's telling when nearly all of the them call out this appraiser by name without me giving out their name. The guy has a reputation in the neighborhood as being a low baller, refusing to consider any information submitted in the tidewater process and being extremely difficult to work with. They've been in the business for 42 years and think they know better than everyone else. So yes, I will blame the appraiser for being a grossly incompetent a-hole.

Appraisal information is available on the Marion County website. So when some conventional buyers get an appraisal at/or above the increased purchase price of $290K for the house I was trying to buy that the VA appraiser only gave $237K, I'm just supposed to let that go even though this one person is costing me thousands of dollars in additional expenses? Not a chance.

If the same appraiser appraised the same house within a week for a 20k difference that brings up major questions. If he is using year old comps to go lower that is a problem. If he is using new market data obtained to make this decision its a different matter. If you sent in comps that you know he used a week before for the same house and he rejected them that seems like a big issue.

 

[Cob]

Scenario: Conventional Loan gets an appraisal for a house at purchase price for $310K, but wanted some seller concessions that the sellers declined, and the buyers walked. The house goes back on the market and within a week or so the sellers get a new contract with a VA loan buyer. So because VA requires its own appraisal they send their appraiser out (who just happens to be the same person that appraised the house I was trying to buy). This VA appraiser comes back with an appraisal of $290K, nearly $20K less than the appraisal done the week before, using comps. nearly a year old. During Tidewater the comps used in the conventional appraisal are submitted, but the VA appraiser refuses to consider them for one reason or another. Deal crashes.

When I talk to several realtors in the area asking about whether they've seen issues with VA/FHA appraisals without mentioning any names, it's telling when nearly all of the them call out this appraiser by name without me giving out their name. The guy has a reputation in the neighborhood as being a low baller, refusing to consider any information submitted in the tidewater process and being extremely difficult to work with. They've been in the business for 42 years and think they know better than everyone else. So yes, I will blame the appraiser for being a grossly incompetent a-hole.

Appraisal information is available on the Marion County website. So when some conventional buyers get an appraisal at/or above the increased purchase price of $290K for the house I was trying to buy that the VA appraiser only gave $237K, I'm just supposed to let that go even though this one person is costing me thousands of dollars in additional expenses? Not a chance.

I don't believe half the things I hear from Realtors or the general public, according to you the appraiser is being "a grossly incompetent a-hole" and "has a reputation in the neighborhood as being a low baller" which coming from a Realtor means he doesn't hit their expected number. I'm sure that mean A-hole appraiser knows you and is just out to get you, again GOOD LUCK to you, if it happens again, I am SURE that the next appraiser is also just "a grossly incompetent a-hole" and "has a reputation in the neighborhood as being a low baller"

Maybe just next time have a Realtor give a CMA and sign it and give it to the lender saying the property is worth X amount, I'm sure the Realtor will have NO problem doing that and sticking their neck out for you, they will jump at the chance to prove the "a grossly incompetent a-hole" "low baller" appraiser wrong, that will finally be their chance to do that.

 

[Mike Garrett RAA]

Let me tell you where I sit before I tell you where I stand. In my 41st year of residential appraisal and 28 years on the VA panel. That said, I cannot comment on your appraisal for 2 reasons. 1. I haven't seen it. 2. I don't know your market.

Now that that is out of the way, let me tell you of what I just ran into this week. Veteran is trying to refinance. He bought the property in March of this year for $631K and some change. I received the request for an appraisal (1805) and the refinance amount is $951,000. My first reaction was..."ah, don't want the veteran to pay $750 for a VA appraisal that isn't going help him". Darn...probably just violated USPAP. Am I an advocate for the veteran? No, but I am still a Christian and I know..."thou shall not screw the borrower". I'm also smart enough to know..."this one will probably end up being more problems than the appraisal fee is worth. So, I called the POC (lender) and informed them of the sales that I found were no where near what the veteran buyer thinks his home is worth. They said..."do the appraisal. The veteran already paid the appraisal fee".

Why on earth would someone think their residence has gone up $320,000 in 7 months? Inquiring minds really, really would like to know. Gosh, maybe he finished a basement level? Added $50,000 in landscaping? Nope. none of that.
Seems the builder just sold his company, one of the largest in my market, to a national home builder. That builder saw that prices were going up at about 15% per year so they raised the prices of homes from high $670s to mid to high $900s. Our veteran buyer got wind of that and immediately thought his house just went up that much.

Sorry to say "that ain't the case, Charlie!" I have three recent closed sales of the exact same model, one on the same street, and all in the mid to upper $670's. Won't tell you what my appraised value was but it certainly wasn't $951,000. So now I am the bad guy. I have been told I don't understand the market! Been told I can expect a call from an attorney! Been told my appraisal is being turned into the state. All of which I say....."Bring it on!".

I have said all of that to just say this...."Builders think they can get what ever they want even if there is no market support for the price". Appraisers, on the other hand, have to have closed sales to support their opinion of value".

Good luck, hope you get the house you want and also hope you don't pay more than it's really worth!

 

[Hopeful2021Buyer]

Let me tell you where I sit before I tell you where I stand. In my 41st year of residential appraisal and 28 years on the VA panel. That said, I cannot comment on your appraisal for 2 reasons. 1. I haven't seen it. 2. I don't know your market.

Now that that is out of the way, let me tell you of what I just ran into this week. Veteran is trying to refinance. He bought the property in March of this year for $631K and some change. I received the request for an appraisal (1805) and the refinance amount is $951,000. My first reaction was..."ah, don't want the veteran to pay $750 for a VA appraisal that isn't going help him". Darn...probably just violated USPAP. Am I an advocate for the veteran? No, but I am still a Christian and I know..."thou shall not screw the borrower". I'm also smart enough to know..."this one will probably end up being more problems than the appraisal fee is worth. So, I called the POC (lender) and informed them of the sales that I found were no where near what the veteran buyer thinks his home is worth. They said..."do the appraisal. The veteran already paid the appraisal fee".

Why on earth would someone think their residence has gone up $320,000 in 7 months? Inquiring minds really, really would like to know. Gosh, maybe he finished a basement level? Added $50,000 in landscaping? Nope. none of that.
Seems the builder just sold his company, one of the largest in my market, to a national home builder. That builder saw that prices were going up at about 15% per year so they raised the prices of homes from high $670s to mid to high $900s. Our veteran buyer got wind of that and immediately thought his house just went up that much.

Sorry to say "that ain't the case, Charlie!" I have three recent closed sales of the exact same model, one on the same street, and all in the mid to upper $670's. Won't tell you what my appraised value was but it certainly wasn't $951,000. So now I am the bad guy. I have been told I don't understand the market! Been told I can expect a call from an attorney! Been told my appraisal is being turned into the state. All of which I say....."Bring it on!".

I have said all of that to just say this...."Builders think they can get what ever they want even if there is no market support for the price". Appraisers, on the other hand, have to have closed sales to support their opinion of value".

Good luck, hope you get the house you want and also hope you don't pay more than it's really worth!

What you said makes sense. I don't dispute it. And if there are no comparable sales to back up the refinance, then there's no standing for the veteran.

But that's not what happened in my case.

I was buying a home for $280K. A 3/2 1720sqft quality new construction home on a fully sodded/irrigated lot about 0.20 acre in an area known as the Ocala Triangle (Zip 34476) in SW Marion County (SR 200 & I-75 are the long sides and the Nature Preserve that divides the neighborhood from Marion Oaks as the base). My house was the 5th house in a new development off of SW 103rd St just north of the Oak Run retirement community. As such, unlike the area homes on well/septic, the new development was on public water/sewer.

The first four homes the builder built last year were built/sold in mid-late 2020
3/2 1684sqft - $237,000
3/2 1760sqft - $244,000
3/2 1720sqft - $260,000
3/2 1880sqft - $290,000

All the homes have the same number of rooms, similar square footage, and lot size with the main difference being some of the homes had better upgrades. All homes appraised at least purchase price according to Marion County's website except for the $260,000 house which didn't have an appraisal so I am assuming it was a cash buyer. The last of the four homes to close was in December 2020 for the $237K which is the 1 of the 4 properties that the appraiser used even though my house had as many upgrades as the $290,000 house that also sold in December 2020.

The next series of homes the builder built started around March and the builder priced as such:
Another 3/2 1684sqft home - $270,000
Another 3/2 1760sqft home - $265,000
Another 3/2 1720sqft home - $275,000
A new 3/2 1725sqft home (the one I was trying to buy - $280,000

This is in line what was going on with pricing trends in Marion County during the early part of 2021 which has only accelerated. When I was looking at selling my own home that I bought for $219K back in 2018 just after Christmas, the realtor told me I would be lucky to make $15K after all the closing fees and the house would probably sell in the mid $250's. However, when the market really heated up I put my home on the market in late April and my house appraised and sold for $298,000. Reason I wanted to sell was to downsize and get a manageable yard size that would be easy to fence in and maintain for the dog.

I liked the area I lived in and visited a couple developments in the area that were being built out by some of the national builders. Similar sized homes with less upgrades were under contract for around $260K but all current builds were pending and they told me to get under contract in the timeframe I wanted the prices would be up $30-$40K within a few months. Around June things really got out of control with actual closing sales (not pendings) were flying into the $290's and above. I checked this week and it's even worse. Everything in my zip code that's similar to my house not including all the quality upgrades has sold or is selling for $310K and above. The builder I signed my contract with did not mess with the contract price and honored it despite the costs of all the materials still going up. So from my vantage point and everything going on, I was clearly getting a bargain.

I saw the comps the Realtor submitted in the Tidewater. A couple were from the developments previously mentioned and homes less than 2 miles away. The appraiser shot them down either for lot size or one that he said "was out of price range" even though it was closest to my house in size/quality but was a home from another local builder that had just closed for $325K. Another one was the basic Freeport model which I think is DR Horton's lowest/cheapest model in the area. That one sold for $265,000 but is only 1520 square feet which the appraiser said was too small to compare? None of the homes had the upgraded flooring, cabinetry, or countertops mine had and other than the homes in the other development, the other homes the appraiser used were on well/septic.

The 3 homes the appraiser used was the $237,000 home from December 2020, and another $237,000 sold that also sold in December, and a $239,000 home that sold in March. He used nothing from the past 6 months. There were not less than 10 comps submitted in Tidewater. I went through the builder's preferred lender and they were familiar with the appeal process for the VA so I did what I needed to do.

After searching online for the recent sales for 3/2 < 2000sqft in my zip code, everything has sold for at least more than than $170/sqft. When the builder decided to release me from the contract, they raised the price of the house to $290K. And I have no doubt they will get another buyer for that price because that's still a little less than what DR Horton & Adams Homes are charging.
r

 

[shrubberyvaluation]

What you said makes sense. I don't dispute it. And if there are no comparable sales to back up the refinance, then there's no standing for the veteran.

But that's not what happened in my case.

I was buying a home for $280K. A 3/2 1720sqft quality new construction home on a fully sodded/irrigated lot about 0.20 acre in an area known as the Ocala Triangle (Zip 34476) in SW Marion County (SR 200 & I-75 are the long sides and the Nature Preserve that divides the neighborhood from Marion Oaks as the base). My house was the 5th house in a new development off of SW 103rd St just north of the Oak Run retirement community. As such, unlike the area homes on well/septic, the new development was on public water/sewer.

The first four homes the builder built last year were built/sold in mid-late 2020
3/2 1684sqft - $237,000
3/2 1760sqft - $244,000
3/2 1720sqft - $260,000
3/2 1880sqft - $290,000

All the homes have the same number of rooms, similar square footage, and lot size with the main difference being some of the homes had better upgrades. All homes appraised at least purchase price according to Marion County's website except for the $260,000 house which didn't have an appraisal so I am assuming it was a cash buyer. The last of the four homes to close was in December 2020 for the $237K which is the 1 of the 4 properties that the appraiser used even though my house had as many upgrades as the $290,000 house that also sold in December 2020.

The next series of homes the builder built started around March and the builder priced as such:
Another 3/2 1684sqft home - $270,000
Another 3/2 1760sqft home - $265,000
Another 3/2 1720sqft home - $275,000
A new 3/2 1725sqft home (the one I was trying to buy - $280,000

This is in line what was going on with pricing trends in Marion County during the early part of 2021 which has only accelerated. When I was looking at selling my own home that I bought for $219K back in 2018 just after Christmas, the realtor told me I would be lucky to make $15K after all the closing fees and the house would probably sell in the mid $250's. However, when the market really heated up I put my home on the market in late April and my house appraised and sold for $298,000. Reason I wanted to sell was to downsize and get a manageable yard size that would be easy to fence in and maintain for the dog.

I liked the area I lived in and visited a couple developments in the area that were being built out by some of the national builders. Similar sized homes with less upgrades were under contract for around $260K but all current builds were pending and they told me to get under contract in the timeframe I wanted the prices would be up $30-$40K within a few months. Around June things really got out of control with actual closing sales (not pendings) were flying into the $290's and above. I checked this week and it's even worse. Everything in my zip code that's similar to my house not including all the quality upgrades has sold or is selling for $310K and above. The builder I signed my contract with did not mess with the contract price and honored it despite the costs of all the materials still going up. So from my vantage point and everything going on, I was clearly getting a bargain.

I saw the comps the Realtor submitted in the Tidewater. A couple were from the developments previously mentioned and homes less than 2 miles away. The appraiser shot them down either for lot size or one that he said "was out of price range" even though it was closest to my house in size/quality but was a home from another local builder that had just closed for $325K. Another one was the basic Freeport model which I think is DR Horton's lowest/cheapest model in the area. That one sold for $265,000 but is only 1520 square feet which the appraiser said was too small to compare? None of the homes had the upgraded flooring, cabinetry, or countertops mine had and other than the homes in the other development, the other homes the appraiser used were on well/septic.

The 3 homes the appraiser used was the $237,000 home from December 2020, and another $237,000 sold that also sold in December, and a $239,000 home that sold in March. He used nothing from the past 6 months. There were not less than 10 comps submitted in Tidewater. I went through the builder's preferred lender and they were familiar with the appeal process for the VA so I did what I needed to do.

After searching online for the recent sales for 3/2 < 2000sqft in my zip code, everything has sold for at least more than than $170/sqft. When the builder decided to release me from the contract, they raised the price of the house to $290K. And I have no doubt they will get another buyer for that price because that's still a little less than what DR Horton & Adams Homes are charging.
r

Nothing within 6 months and no market condition adjustments? "Was out of price range" does not make sense and does not seem like a valid reason to exclude as it comes off as he was picking based on sales price. If a 1520 sq.ft. is too small to compare and sold above the comps he used that seems like a red flag unless its in a much superior area. I don't know the area but if comps were available within 6 months even if locational adjustments needed to be used that seems prudent unless you are in some very niche market. Adjustments can be made for lot size, maybe if they are on an acre+ I could see it maybe appealing to a different typical buyer.

 

[Hopeful2021Buyer]

Nothing within 6 months and no market condition adjustments? "Was out of price range" does not make sense and does not seem like a valid reason to exclude as it comes off as he was picking based on sales price. If a 1520 sq.ft. is too small to compare and sold above the comps he used that seems like a red flag unless its in a much superior area. I don't know the area but if comps were available within 6 months even if locational adjustments needed to be used that seems prudent unless you are in some very niche market. Adjustments can be made for lot size, maybe if they are on an acre+ I could see it maybe appealing to a different typical buyer.

Am I allowed to name the addresses of the homes submitted in Tidewater or is this not allowed on the forum? Not trying to violate any privacy issues so if this isn't allowed, the mods can remove. But I'm reading the appraisal report and then comparing to the two that were done on the house I bought in 2018 & sold in 2021.

On the reports of my house I bought/sold, the write up is way different. It refers to the Ocala Waterway as "suburban" rather than "rural". Not sure if that makes a difference, and the home I sold says prices were increasing. On the house I was trying to buy it was was marked as "rural" and "stable" prices. The appraisal of the home I bought and sold gave increased weight to the most recent sales while the one for the house I was trying to buy used equal weight. These houses are only about 2 miles apart (my old house was near SW 103rd & SW 47th while the new house was closer to SW 103rd & SW 67th.

The homes submitted in Tidewater:
4955 SW 116th PL - 3/2 1799sqft $326,000 sold 8/15- This is in a community called Marco Polo. It was the one that came the closest to the quality upgrades I had. It was within the appraiser's defined neighborhood boundary for the property, but he says he omitted it because it was "out of price range". Not sure what that means.

5808 SW 109th St Rd 3/2 1534sqft $279,900 sold 9/3 - This less than a mile from my house trying to buy. Not too many quality upgrades but it was similar in age. The appraiser ommitted it because of the lot size (it say on a little over a half-acre whereas my lot would have only been 1/5 acre), but I don't believe the builders cleared the entire lot as I drove by and there's still tons of trees in the back that would have to be cleared and there is no sod/irrigation system.

8732 SW 49th Circle 4/2 1498sqft $279,990 sold 9/15 - This is a freeport model from DR Horton that sold in Greystone Hills. It's the farthest of the properties from the one I was trying to buy. The builder shot this one down saying it was "smaller". They also mentioned that there were amenities not included in the new development (such as a community pool). How much of a price adjustment would that be?

11005 SW 62nd Ave Rd 3/2 1766sqft sold $279,900 sold 8/13 - Another one the realtor omitted because of lot size as it was on .50 acres vs 0.20 acre.

The Appraiser used the following properties
6752 SW 109th Lane $237,900 - 3/2 1684sqft sold 12/15 - This was the last of the 4 homes the builder built last year to close. The are actually building a new model this year where pricing started at $269,900 but has since gone up to $279,900. You can see a video on the inside of the property below.

6007 SW 116th St Re $237,915 4/2 1715sqft sold 12/22

6115 SW 117th St Rd $239,900 4/2 1715sqft sold 4/12/21

The appraiser rejected all the tidewater comps. Apparently, despite prices increasing nearly 20% in the past nine months they weighted all properties equally and marked the pricing market as stable.

For an idea on the home I was trying to buy, here is the link to the new development with videos of all the 4 existing homes. Keep in mind my home is closer in size to the Madison and has as nice upgrades as the Brianna, but those were ignored in favor of using the Jamestown. And supposedly none of these homes have appreciated in value because it the appraiser's mind no comparable sales have occurred since April 2021.

I see there are a lot of out of state appraisers, I hope someone from FL can weigh in. It's pretty common sense that in the link below you can't buy any of these homes for $237,000 in this market, which is what the appraiser appraised out.

If you want me to attach my report, I can do that also.

(no title)

At America's Finest Homes, our philosophy is simple. We provide the best possible value without sacrificing quality, workmanship or materials. Brianna Model Gallery Visit our new Oak Ridge community! THE MADISON 3 BED | 2 BATH | 1,725 SF THE JAMESTOWN 3 BED | 2 BATH | 1,687 SF THE BRIANNA 3 BED | 2…

americasfinestco.wordpress.com

 

[shrubberyvaluation]

4955 SW 116th PL - 3/2 1799sqft $326,000 sold 8/15- This is in a community called Marco Polo. It was the one that came the closest to the quality upgrades I had. It was within the appraiser's defined neighborhood boundary for the property, but he says he omitted it because it was "out of price range". Not sure what that means.

To me it sounds like he doesn't have a valid reason to exclude it so he is just saying garbage. He should of put some reason it would appeal to a different typical buyer rather than that.

5808 SW 109th St Rd 3/2 1534sqft $279,900 sold 9/3 - This less than a mile from my house trying to buy. Not too many quality upgrades but it was similar in age. The appraiser ommitted it because of the lot size (it say on a little over a half-acre whereas my lot would have only been 1/5 acre), but I don't believe the builders cleared the entire lot as I drove by and there's still tons of trees in the back that would have to be cleared and there is no sod/irrigation system.

I find it hard to believe the lot size would attract a different typical buyer, but I don't know your area.

8732 SW 49th Circle 4/2 1498sqft $279,990 sold 9/15 - This is a freeport model from DR Horton that sold in Greystone Hills. It's the farthest of the properties from the one I was trying to buy. The builder shot this one down saying it was "smaller". They also mentioned that there were amenities not included in the new development (such as a community pool). How much of a price adjustment would that be?

Community amenities could come with a higher HOA fee. Most of the time that I see this in my area it is a buyer preference thing, may be different in the climate in florida. Some people may prefer not having these amenities if there is a lower HOA. I would think if the builder thought a community pool had a substantial impact on what homes could sell for they would put one in if possible. So a smaller home sold for $279,990 and his more dated sales that are more similar in size sold in the 230s? I could understand it maybe if he claimed the area had superior market appeal. Is it within his neighborhood boundaries?

The appraiser rejected all the tidewater comps. Apparently, despite prices increasing nearly 20% in the past nine months they weighted all properties equally and marked the pricing market as stable.

I would also note that the new construction housing probably is more dated due to older contract dates typically.

I would think the report would carry more weight if at least a couple more recent sales were used and adjusted accordingly, but as i said before, I do not know the area.

 

[Tiffany Gibbons]

If you want to file a complaint with a Senator over this you must not have much else going on in life? Do you think they care? Appraising is an opinion of value, its not a perfect process. There is room for interpretation. You can't file complaints based on "value issues" as I've never heard a buyer, seller, realtor, lender tell me my appraisal was "too high"...its always the other way. You would have to file a complaint based on USPAP guidelines or gross negligence. It would be a waste of yours and everyones time and wouldn't change the outcome. I am surprised he upped his value after the reconsideration of value. I have increased my value once out of hundreds of reconsiderations in 20 years. He must be weak willed or new..

If the market is that good and prices are going up, just pony up the 20k. You're not flushing it down the toilet, you are investing in a home. Plus, you are so certain you are right and the appraiser is wrong why wouldn't you? Theres not that shadow of a doubt in your mind is there that it might be overpriced and you don't want to pony up more of your own money? Good luck either way. The appraiser is there to help a lender make a lending decision and potentially help a buyer from overpaying for a home. You can have your own opinion and its your money.

Not to mention, if it was after Tidewater and the appraiser did not raise the value, more than likely, the RLC did an ROV and raised the appraised value to $260,000. That is the official VA appraisal now, the first value by the VA Fee panel appraiser is irrelevant if so. For all we know, the field office sent an appraiser from the local office to field review it, and that was the max the Review Appraiser raised it to, after looking at ALL the data available. If the OP wants to sic his state senator on VA, good luck with that!

Most of the DR Horton communities around here are "lifestyle" communities with all sorts of things included in the HOA fee, including activities, landscaping, dog ballet lessons, etc. Some of them are even age restricted to 55+, so I would not want to go out of the development unless I need a competing builder, etc. It does not matter to an appraiser what the builder is "pricing" similar homes at.

 

[Zoe]

Not to mention, if it was after Tidewater and the appraiser did not raise the value, more than likely, the RLC did an ROV and raised the appraised value to $260,000. That is the official VA appraisal now, the first value by the VA Fee panel appraiser is irrelevant if so. For all we know, the field office sent an appraiser from the local office to field review it, and that was the max the Review Appraiser raised it to, after looking at ALL the data available. If the OP wants to sic his state senator on VA, good luck with that!

Most of the DR Horton communities around here are "lifestyle" communities with all sorts of things included in the HOA fee, including activities, landscaping, dog ballet lessons, etc. Some of them are even age restricted to 55+, so I would not want to go out of the development unless I need a competing builder, etc. It does not matter to an appraiser what the builder is "pricing" similar homes at.

Yes and VA is their friend. They are very skilled in Atlanta. Veteran needs to understand the VA and the veteran have liability in the loan. Appraiser has liability as well.

 

[Zoe]

It would shock you how skilled the appraisers are in Atlanta regional loan center for VA. They are highly skilled. Veteran can talk to licensed appraiser at their Regional loan center.